The European Union is built on the basis of the idea that the free flow of capital between nation states without impediment placed in its way is a good thing. It is assumed that this will increase wealth. And it is assumed that anything that gets in the way of competition is a bad thing, and so is illegal.

Those assumptions are wrong. Unbridled competition is not a good thing. Whilst I am a fan of competition in many areas of life in some it is just straightforwardly wasteful. Take the NHS as an example. Given the objective of the NHS is to provide first class healthcare to everyone involving competition in the process is just folly. Competition requires choice - so every resource would have to be duplicated and then, to ensure the capacity for people to make choice was available, would have to work at way less than full capacity. That would impose an enormous cost, and is likely to seriously undermine excellence as resources were diverted into advertising, marketing, media, and contracting that would destroy investment in healthcare excellence. So unless we substantially increase resources available to the NHS (I suspect by as much as 50%, which we do not have) we can have competition in the NHS or we can have excellence. I know which I want.

And laws that supposedly support competition and that actually support monopolistic power are a decidedly bad thing. That could happen in banking right now. We need nationalised banks in Europe at present. If €2 trillion or more of taxpayer funds are going into banks then they need to be stated owned. but it will be argued by other banks that this will create unfair competition when in fact they are part of the problem that is being cured and will already benefit massively from it. The result is that instead of those funds being used for social good to reform banking forever they will be used to support he status quo. In other words, competition law is being used to impede progress, development and the creation of new opportunity which is the exact opposite of what they should be doing.

There is an answer right now. With the EU in crisis two things are needed. First of all the assumption that the free flow of capital is beneficial has to be questioned. There is very clear evidence that as the markets continue to circle it is not. Ans second competition laws that preserve the status quo of privilege and abuse most people have to be suspended.

19 Responses

In fact this has kind of been done already but as ever in a one sided way only for the benefit of the banking sector. A sector now dependant on huge amounts of subsidy — normally this would be considered an illegal state aid contrary to art 81 of the EU treaty…. So competition rules can it appears be suspended when it suits.

I have a one sentence response that explains why your sensible suggestion won’t happen, Richard. Our leaders lack the ability to lead and display cowardise and cronyism in the face of the need to think outside the box.

Our leaders have great ability to lead.
They display no cowardice.
They display nothing.
Our leaders are not those we vote for.
The ones we vote for have the publicity and plaudits from the people [citation needed]
Our leaders have the power and the money.
Shame we don’t know them.

The problem with EU competiton laws is that they are not intepreted the same or equally applied by the various governments across the EU. I have been involved both from a sales and procurement perspective and have seen governments protect their own suppliers by “bending” the rules, for example writing specifications around a certain supplier. I have equally seen cases in this country where company lawyers (in fear of our own government) have forced us into accepting substandard, non-compliant equipment from some other EU based supplier.

Would the Bombarier Trains fiasco have happened in say Italy – absolutely not. I would guarantee that order would have gone to an Italian supplier in that scenario.

Article 81 now Art. 101 under the Lisbon treaty is defined on the basis that it applies to “undertakings” an undertaking could be a company (how ever formed), but it must have as it object of effect the pursuit of profit essentially (this is a hugely simplified version, the full one would take 20 pages to explain). The FENIN case established that the purpose of public health care could not in any way fall within this definition of an undertaking. It was the provision of a ‘social service’ not a business service. It therefore falls 100% outside the ambit of competition law.

I think a great deal of the problem has come from the proposed implementation of the Health and Social Care Bill. The changes to the NHS will not expose the NHS to competition such as having competitors that will force it to drive down its “price” in order to maintain “customers”. This last sentence should show the absurdity of such a suggestion and why the press have the very wrong end of the stick, so much so the articles they write are not worth the paper they are written on. There will be no external competition affecting the operation of the NHS. What it will do it move the monetary management of the NHS to a board. That board will be another government body, but this time, its sole purpose will be the regulation of costs.

The NHS is currently wasting vast quantities of money on inefficient supply chains, because there is no one over seeing it. The new ‘monitor’ group will do this. If the price of a Band-Aid is too high from a Taiwanese supplier, they will buy from a Chinese supplier instead. It will enable the Doctors actually providing the care to tell the new group what is actually needed for their patients, and for this group to find the best option available. It will reduce the inefficiencies so the NHS can get on with providing an even higher standard of care. It will enable competition in so far as people have to provide the NHS with good quality products at a reasonable price, not rip the NHS off by charging what they wish.

Getting back to the competition point. Think about this for a minute, could the UK expressly enact a law contrary to the provisions of EU law. In other words, could they take actions that would directly contravene the Lisbon Treaty? The answer is no, it is crazy to think otherwise. The press think this is implementing NHS style competitors to the market (making the NHS a company which other companies would compete with). Such thoughts are so far wide of the mark that they miss the point completely. What would that require before that type of action could be taken? The UK leaving the EU and repealing the Lisbon Treaty for a start, and abolishing the OFT next would help.

I am still not sure where the banks have used competition law to protect any anti-competitive behaviour.

Private companies are licking their lips at the prospect of juicy NHS contracts. Are these contracts making money for the NHS or the private companies that are supplying the work? Why is the NHS pretty much forced to contract certain services out to private tender?

Another thought……do you believe PFI contracts for the NHS are good value for money or a total rip-off? And before you say it, YES, I do know New Labour extensively used PFI contracts in the NHS. The Con-Dems are continuing to use them though!

“Healthcare delivery in England could be bound by key elements of EU competition and procurement law where bidders from across the European Union have the same rights as local NHS providers, say two experts on bmj.com.

The authors of an analysis on challenges of EU competition law for general practice commissioning, Dr Rupert Dunbar-Rees and Robert McGough, question whether the government has fully considered the impacts of the health and social care bill and in particular the ‘any willing provider’ (AWP) proviso”

“Prior inequitable and usurious profits accumulated by banks from fractional reserve banking practices are not addressed in this draft Act, which therefor leaves the banks in possession of prior profits of some $1.2 trillion (2008 commercial bank net worth), most of it from such unjust practices. Likewise, prior distribution of profits to bank owners is not addressed. This vast wealth and the economic and political influence it represents, particularly through the control of the media it has purchased, constitutes a standing danger to the Republic and should be addressed, perhaps by some effective form of anti-trust legislation and/or Court action breaking-up the giant banks (and media) into small localized units with separate ownership, or more aggressively by a bank nationalization, break-up into smaller units, and immediate reprivatization by public stock sale pursuant to rules insuring widespread ownership”